Business Organisations Flashcards
What is an organisation?
A group of people that is organised and managed to follow a corporate goal or need.
What does an organisational structure explain?
Who is in charge of whom and who has responsibility over what.
What are systems in an organisation?
Processes with steps of tasks that make things happen efficiently and consistently.
What happens when a freelancer takes on an assistant?
It becomes an organisation, necessitating more management and processes.
What are the two types of organisational structures?
- Vertical (tall)
- Horizontal (flat)
What does the scalar chain refer to?
The number of management levels within an organisation.
What is the span of control?
The number of people a manager has control over.
What factors affect a manager’s span of control?
- Geographical location
- Level of competency
- Workload
Describe vertical organisational structures.
Focus on a strict hierarchical layering system with a long scalar chain and narrow span of control.
What are the advantages of vertical structures?
- Closer supervision of employees
- Clear lines of responsibility
- More opportunity for promotion
What are the disadvantages of vertical structures?
- More bureaucratic
- Less employee freedom
- Slower decision-making
Describe horizontal organisational structures.
Have fewer management levels with a short scalar chain and wide span of control.
What are the advantages of horizontal structures?
- Quick decision-making
- More cost-effective
What are the disadvantages of horizontal structures?
- Less room for promotion
- Managers have less control over employees
What can cause the transformation of organisational structures?
Changes in the internal and external environment, such as advances in technology.
What are virtual organisations?
Structures where most work is outsourced to other organisations.
What is a shared service capability?
Routine processes carried out by a shared service centre for multiple departments.
What are virtual teams?
Teams that work remotely towards a common goal using IT systems.
What challenges do virtual teams face?
- Forming a team
- Processes and goals
- Leadership
- Knowledge sharing
- Morale
- Cultural differences
What are profit-seeking organisations?
Organisations that aim to maximise returns for owners or shareholders.
What are unincorporated organisations?
Business owners and the business share the same legal identity.
What are the two main types of unincorporated organisations?
- Sole trader
- Partnership
What is unlimited liability?
Owners are personally responsible for all debts of the business.
What are incorporated organisations?
Businesses with a separate legal identity protecting owners from personal liability.
What are the two main types of incorporated organisations?
- Private limited companies (Ltd)
- Public limited companies (PLC)
What is a cooperative?
An organisation owned and controlled by its members rather than shareholders.
What are not-for-profit organisations?
Organisations that do not aim to make a profit for owners.
What types of organisations can exist in the public sector?
- State-owned industries
- Government-run departments
What are Non-Governmental Organisations (NGOs)?
Private sector not-for-profit organisations focusing on goals other than profit maximisation.
What influences stakeholders in not-for-profit organisations?
- Objectives and goals
- Strategies
- Management style and practice
What are alliances in a business context?
When two or more firms join together to combine talents or strengths for growth.
What is a characteristic of successful strategic alliances?
Reduced risk due to shared expertise and commitment.
What is a sales alliance?
A sales alliance is when two or more companies sell products or services that complement one another.
For example, Starbucks and Barnes and Noble formed a sales alliance to sell coffee in bookstores.
Define a geographic-specific alliance.
A geographic-specific alliance is an agreement to market products and services in a particular geographical location.
For instance, A Beer producing a popular beer in Country A and B Beer brewing and distributing it in Country B.
What is an investment alliance?
An investment alliance is the agreement to combine funds for shared investment.
An example is the consortium of energy companies funding the Trans-Alaska Pipeline System.
What characterizes a joint venture?
A joint venture is an agreement to share control, profit, and loss in a particular economic undertaking.
The alliance of Horace, Shahib, and Beatrice setting up a new company is an example.
What is licensing in business?
Licensing is when one company or individual acquires a license to use another company or individual’s intellectual property.
Nestle’s deal with Starbucks to sell coffee products outside Starbucks’ cafes is a notable example.
How does franchising differ from licensing?
Franchising involves more central control and requires individuals or companies to pay royalties or fees to use a company’s products and brand.
Fast-food chains like KFC and Subway operate as franchises.
What are the four main types of organisational structure?
The four main types of organisational structure are:
* Entrepreneurial/Simple
* Functional
* Divisional
* Matrix
Each structure serves different organizational needs and sizes.
What is an entrepreneurial/simplistic structure?
An entrepreneurial structure primarily exists in small businesses with a single boss managing the team.
Roles in this structure can be flexible to adapt to changing business needs.
Describe a functional structure.
A functional structure groups the organisation into functional areas such as IT, marketing, and human resources, allowing operational efficiencies.
Employees focus on their specialized skills and knowledge.
What defines a divisional organisational structure?
In a divisional structure, teams focus on a single product or service line and are more independent than departments.
Divisions may be organized by products, geographical areas, or customer types.
What is a matrix structure?
A matrix structure features multiple reporting lines, where individuals may have more than one manager.
This is common in project-based environments.
Fill in the blank: A project is a human activity that achieves a clear objective against a _______.
[timescale]
What are the main stages of procurement development according to Reck and Long?
The main stages are:
* Passive
* Independent
* Supportive
* Integrative
These stages reflect the increasing strategic importance of procurement in organizations.
What is the difference between purchasing and supply?
Purchasing is the acquisition of items as needed, while supply involves strategic focus and maintaining good supplier relationships.
This distinction typically applies in the later stages of procurement development.
What are the four main supplier sourcing strategies?
The four strategies are:
* Single sourcing
* Multiple sourcing
* Delegated sourcing
* Parallel sourcing
Each strategy has different implications for supplier relationships and operational flexibility.
What is the key principle of marketing?
Key principles include:
* Identify customer needs
* Serve those needs at an acceptable price
* Stress product benefits in promotional content
* Match sales approach with customer preferences
Marketing goes beyond just advertising and selling.
What does human resource management (HRM) aim to do?
HRM aims to strategically deploy a company’s workforce to meet business goals.
It evolved from the need to safeguard workers’ rights during the industrial revolution.
What were the working conditions for women and children during the 19th century industrial revolution?
Harsh conditions, working 60 hours a week in dangerous environments for very little pay.
What role was created to safeguard personnel during the industrial revolution?
Welfare officer.
When was the term ‘human resource management’ established in the US?
1980s.
What is recognized as a company’s greatest asset?
Workforce.
Why is employee retention important for a company?
To prevent skills, information, and expertise from moving to competitors.
How can human resource management be defined?
The process of strategically aligning a company’s human assets to the needs of the business.
What typical activities are included in human resource management?
Recruitment and training.
What initiative did Unilever introduce in 2010 to improve employee well-being?
Fit Business Programme.
What were the reported outcomes of Unilever’s Fit Business Programme?
A quarter of staff reported weight loss; improvement in health and productivity.
How have finance and HR traditionally been viewed in organizations?
As two distinct areas with different roles.
What is the finance function traditionally viewed as?
A cost to the business.
What is the main responsibility of the HR function?
Functions relating to employees on a personal level.
What is essential for HR and finance departments to do for organizational benefit?
Work together.
What are some mutual decisions that finance and HR need to make?
- Training budget
- Paying overtime
- Future workforce expansion funding.
What are the six main areas of the human resources cycle?
- Recruitment and selection
- Training and development
- Performance management
- Motivation
- Rewards
- Job termination.
What is the distinction between Information Systems (IS) and Information Technology (IT)?
- IS: Systems managing information in an organization
- IT: Technology resources used by a business.
What are the key activities of the finance function?
- Stewardship of financial resources
- Interpreting and reporting financial position
- Collating information for management
- Budgeting and forecasting
- Variance analysis and cost control.
What are the 5 key components of the finance function?
- Financial reporting
- Financial planning
- Management accounting
- Treasury management
- Risk management.
What are critical success factors?
Key areas in which an organization must excel to remain competitive and profitable.
How many critical success factors should an organization typically define?
No more than 4-5.
What are key performance indicators (KPIs)?
Ways to measure an organization’s performance for critical success factors.
Give examples of KPIs for a company that grows through acquisitions.
- % of key staff retained
- Cost savings from acquired companies
- Sales/profit growth in joint business
- Employee satisfaction before and after acquisition
- Customer satisfaction before and after acquisition.
What KPIs might a call center use to measure performance?
- Average calls handled per operator per day
- Average call-waiting time
- Customer satisfaction with call outcomes
- Client satisfaction with services offered
- New business acquisition.
